Chapter 8 Market Segmentation, Targeting, Positioning, and Competition

1. Chapter 8 Market Segmentation, Targeting, Positioning, and Competition

2. LEARNING OBJECTIVES What are the different levels of market segmentation? How can a health care organization divide a market into segments? How can an organization choose the most attractive target markets? How can an organization choose and communicate an effective positioning in the market? How can the organization analyze the competitors� strategies, objectives, strengths, and weaknesses?

3. LO1. What are the different levels of market segmentation? Four levels of micromarketing Segment Niche Local areas Individual Three patterns of market segmentation Homogenous preference Diffused preference Clustered preference Key Words: mass marketing, micromarketing, segment, sector, flexible market offering, niche, preference segment, homogenous preference, diffused preference, clustered preference, Key Words: mass marketing, micromarketing, segment, sector, flexible market offering, niche, preference segment, homogenous preference, diffused preference, clustered preference,

4. LO1. What are the different levels of market segmentation? (cont) Segmentation of consumer markets Geographic - geographic units Demographic - age, life cycle, etc Psychographic - life style, personalities, values Behavioral - knowledge, attitude, use, or response Key Words: cohorts, psychographics, innovator, thinker, achiever, experiencer, believer, striver, maker, struggler, initiator, influencer, decider, payer, user, qulity buyer, service buyer, value buyer, economy buyer, hard-core loyals, shifting loyals, switchersKey Words: cohorts, psychographics, innovator, thinker, achiever, experiencer, believer, striver, maker, struggler, initiator, influencer, decider, payer, user, qulity buyer, service buyer, value buyer, economy buyer, hard-core loyals, shifting loyals, switchers

5. LO2. How can a health care organization divide a market into segments? Business market segmentation Organization size Geographic location Interest profile Resource level Buying criteria Buying process Key Words: first-time prospects, novices, sophisticatesKey Words: first-time prospects, novices, sophisticates

6. LO3. How can an organization choose the most attractive target markets? Segment must rate favorably in 5 areas Measurable Substantial Accessible Differentiable Actionable Decision must be based on Segment�s overall attractiveness Company�s objectives and resources Key Words: needs-based market segmentation approach, measurable, substantial, accessible, differentiable, actionable, undifferentiated marketing, differentiated marketing, invasion plan, market partitioning Key Words: needs-based market segmentation approach, measurable, substantial, accessible, differentiable, actionable, undifferentiated marketing, differentiated marketing, invasion plan, market partitioning

7. LO4. How can an organization choose and communicate an effective positioning in the market? Choose points-of-parity and points-of-difference Product differentiation Services differentiation Personnel differentiation Channel differentiation Image differentiation Key Words: STP, positioning, customer-focused value proposition, points-of-parity, points-of-difference, consumer desirability criteria, relevant, distinctive, believable, deliverability criteria, feasibility, communicability, sustainability, form, features, customer value, organization cost, performance quality, conformance quality, durability, reliability, reparability, style, design, ordering ease, delivery, installation, customer training, customer consultant, maintenance and repair, competence, courtesy, credibility, reliability, responsiveness, communication, coverage, expertise, performance, identity, imageKey Words: STP, positioning, customer-focused value proposition, points-of-parity, points-of-difference, consumer desirability criteria, relevant, distinctive, believable, deliverability criteria, feasibility, communicability, sustainability, form, features, customer value, organization cost, performance quality, conformance quality, durability, reliability, reparability, style, design, ordering ease, delivery, installation, customer training, customer consultant, maintenance and repair, competence, courtesy, credibility, reliability, responsiveness, communication, coverage, expertise, performance, identity, image

8. LO5. How can the organization analyze the competitors� strategies, objectives, strengths, and weaknesses? Strategies - ask what range in the strategic group? Objectives - ask what is the competitor seeking and what drives the behavior Strengths - monitor all three Share of market Share of mind Share of heart Weaknesses - focus on one Strong versus weak Close versus distant �Good� versus �bad� Key Words: industry, pure monopoly, oligopoly, pure oligopoly, differentiated oligopoly, monopolistic competition, pure competition, vertical integration, competitor map, strategic group, share of market, share of mind, share of heart, strong vs weak, closes vs. distant, good vs bad, Key Words: industry, pure monopoly, oligopoly, pure oligopoly, differentiated oligopoly, monopolistic competition, pure competition, vertical integration, competitor map, strategic group, share of market, share of mind, share of heart, strong vs weak, closes vs. distant, good vs bad,

9. LO5. How can the organization analyze the competitors� strategies, objectives, strengths, and weaknesses? Competitive strategies depend upon the role each plays Market-leader Market challenger Market follower Market nicher Key Words: market-leader strategies, expanding total market, level, quantity, frequency, continuous innovation, position of defense, flank defense, preemptive defense, counteroffensive defense, mobile defense, contraction defense, market-challenger strategies, frontal attack, flank attack, encirclement attach, bypass attack, technological leapfrogging, guerrilla warfare, product imitation, product innovation, specialization, multiple niching, single niching, customer-centered companyKey Words: market-leader strategies, expanding total market, level, quantity, frequency, continuous innovation, position of defense, flank defense, preemptive defense, counteroffensive defense, mobile defense, contraction defense, market-challenger strategies, frontal attack, flank attack, encirclement attach, bypass attack, technological leapfrogging, guerrilla warfare, product imitation, product innovation, specialization, multiple niching, single niching, customer-centered company

10. CONCLUSION Success results from serving part of a market well instead of the whole market poorly. Market segments can be targeted in many ways. Positioning is based on points-of-parity and points-of-difference, based on product, service, personnel, channels, or image. Key Words: Key Words: